WASHINGTON – The federal government and the Federal Reserve have committed $12.8 trillion in spending so far to bailouts and “stimulus” packages – an amount nearly equal to the value of everything produced in the U.S. in 2008.
That’s the report from Bloomberg News about efforts to reduce the economic drag of a debt-based recession – the worst financial crisis to hit the U.S. since the Great Depression.
The numbers are growing so fast, it’s tough for most Americans to grasp.
Dana Johnson, chief economist for Comerica Bank in Dallas, says: “The comparison to GDP serves the useful purpose of underscoring how extraordinary the efforts have been to stabilize the credit markets.”
The tally works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.
The combined commitment has increased by 73 percent since November, when Bloomberg first estimated the funding, loans and guarantees at $7.4 trillion.
Federal Reserve officials project the economy will keep shrinking until at least mid-year, which would mark the longest U.S. recession since the Great Depression.